Regulators in British Columbia have handed down market suspensions and financial penalties to a pair of corporate executives that were found to have illegally distributed shares in their company.

A hearing panel of the B.C. Securities Commission (BCSC) ordered that Ken Chua, president and CEO of Nevada-based, Oriens Travel and Hotel Management Corp., be banned for six years from trading, serving as a director or engaging in investor relations. Chua was also ordered to disgorge the US$58,500 that the company raised from investors in B.C., and to pay an administrative penalty of $35,000.

Oriens’ corporate secretary, Alexander Anderson, was hit with a two year ban and a $15,000 penalty.

The sanctions come after the BCSC found earlier this year that they illegally distributed securities in the company, breached a cease trade order (CTO), and made representations to investors in violation of securities laws by failing to alert them to the CTO.

According to the decision, BCSC staff sought an eight year ban against both men and monetary penalties of at least $50,000 each. It says that Chua sought a two year ban and a $20,000 penalty; and, Anderson proposed a two-year ban. The panel ordered sanctions that fall between the two sides’ positions, citing the facts of this particular case, and previous BCSC decisions.

In particular, it said that a shorter market ban is appropriate for Anderson, as he has demonstrated remorse, and because his role in the distribution was more limited than Chua’s. “We believe he has learned from his mistake, but a two-year market ban is warranted to ensure he takes that time to better understand his duties and responsibilities when engaged in our capital markets,” it says. It also did not order disgorgement against Anderson, saying that he was not personally enriched by the violations.

The panel also declined to ban Chua and Anderson from acting as registrants, saying, “That is not appropriate. Their misconduct does not support that prohibition given that none of it had anything to do with conduct as a registrant.”

Nevertheless, it also notes that carrying out an illegal distribution represents “serious misconduct”, that this was heightened in this case by the existence of a cease trade order, and because they did not tell investors about the CTO.

“The respondents’ conduct damages the reputation and integrity of our securities market. Investors become hesitant to invest in the market if they cannot trust those who sell securities to do so in compliance with securities rules and regulations,” it said in the decision.